Credit card fraud losses fell by £440 million last year for the first time since 2006. Losses from cheque fraud also fell sharply to just under £30 million, according to new figures released today by the UK Cards Association.
Speculation of the tightening of security on cards and cheques has forced criminals to turned their attention to online banking. Fraud losses rose by 14 per cent to £59.7 million in the online banking sector.Melanie Johnson, spokeswoman for the UK Cards Association, said the sharp drop in card fraud was due to a combination of measures. These included the widespread adoption of chip and PIN cards and increase vigilance of banks and retailers.
Banks and card companies increasingly monitor individuals’ spending patterns, so that an unusual attempted purchase triggers an alert before the fraudulent transaction can be completed. This measure was particularly effective in stopping card fraud abroad, which fell by 47 per cent to £122 million.
They were targeting security weaknesses in customers’ PCs, rather than banks’ own systems, which were more difficult to attack. There was also a 16 per cent increase to 51,000 in recorded incidents of phishing - where fraudsters send fake e-mails posing as financial organisations in order to extract personal details from individuals.
David Cooper, chairman of the Fraud Control Steering Group, the payment industry’s leading fraud prevention group, said: “Although online banking losses have shown a year-on-year increase, card fraud remains a main focus of criminal activity. The industry remains committed to containing and reducing all areas of fraud.”
